New Manager Finds Orange City's Money Problems Big But Solvable

ACROSS VOLUSIA

October 30, 1999|By Bo Poertner of The Sentinel Staff

If Orange City's new manager wasn't consumed by the town's financial crisis, he would be focusing all of his attention on two other big problems: restructuring City Hall and filling important personnel vacancies.

As it stands, after less than four weeks on the job, John McCue is grappling with all three.

Because the city is tiptoeing through fiscal quicksand, the budget is McCue's priority. But personnel costs are the major expense of any budget, so his problems are intertwined.

To save money, he can leave open top management positions in planning, finance, personnel, finance and parks and recreation. At the same time, that strategy could undermine city services.

Also, leaving the positions open puts enormous pressure on lower-level workers and could harm morale.

Still, McCue, who is refreshingly candid about the city's problems, will do what he has to do.

``I won't do anything before the beginning of the new year - the end of the first quarter'' of the fiscal year, he said. ``Then it becomes a balancing act.''

He'll hold out as long as possible. When city services start to suffer, he'll start filling vacancies.

Until then, McCue will look for ways to streamline the operation. Some departments are likely to be consolidated.

He will look for people both inside and outside city government who can handle the complexities that the restructuring is likely to create.

Orange City's budget crisis is the result of poor fiscal management on the part of past administrations. The problem, he said, is that administrators based spending on inflated revenue projections.

To make up for spending more money than the city was bringing in, they used reserve funds. Unfortunately, as the reserve funds dwindled to near nothing, no one bothered to curb the spending.

As a result, on paper at least, Orange City is about $435,000 in the hole.

The good news is the council recognized the problem in time enough to give its new administrative captain a fair shot at righting the listing ship.

Even so, the city is on the very brink of disaster. If nothing were done, Orange City might well have been able to continue operating as a municipality no longer than six months or a year, McCue said.

Under that worst-case scenario, state government would have stepped in to rescue the ``fiscally distressed'' city.

That's still a possibility but unlikely, McCue said.

He's confident that with harsh budgetary ``squeezing,'' he can help Orange City recover within a couple of years.

His latest move was to require all directors to revisit their 1999-2000 budgets and find ways to reduce their expenses by 5 percent and 10 percent. The directors also have to link the budget reductions to city services in each of those scenarios to show exactly what services would be lost.

McCue said he will use the information to revisit the city budget at mid-year. Things could get unpleasant at that point - layoffs are possible. But McCue said city employees are playing a critical role in resolving the city's problems, and he is confident they will help restore the town to good fiscal standing.

``We're not in good shape. There's no question about that,'' McCue said. ``But we're not in such bad shape that it can't be fixed.''